Custer’s Call Before Congress: The Trader Post Scandal and Testimony

In March of 1876 two of three U.S. Army columns dispatched by General Sheridan were in the field. They suffered severely due to freezing and blizzard conditions. While the two columns suffered dutifully in attempting to carry out orders, however, Lieutenant Colonel George Armstrong Custer was not even with his command.

The third column remained, perhaps snugly, in quarters at Fort Abraham Lincoln. Their late departure would be attributed in part to deeply drifted snow. Conditions on the plains were anything but conducive to the conduct of Sheridan’s wished-for winter campaign. But another factor delayed the Dakota Column’s departure.

The more significant reason for the column’s inactivity was that Custer, the Seventh Cavalry’s Lieutenant Colonel, had been called back to Washington, D.C. to testify before Congress. His first testimony took place there on March 29, 1876.

A huge political and financial scandal had been brought to light. It was learned the trader at each army post held a virtual monopoly. The same applied to the agent at each of the government’s Indian agencies. Prices were then inflated, and a huge percentage was kicked back to the head of the scheme and his group of “investors.” Both soldiers and Indians suffered for it.

At the head of the scandalous scheme was Secretary of War William Belknap. The scandal was not brought to light initially by Custer, but Custer had complained about his soldiers being price-gouged by the unscrupulous post traders. His national renown, or celebrity, would certainly have lent credibility or political clout to its investigators. A  committee headed by one of Belknap’s political foes pounced on this advantage.

Trying to avoid impeachment, Belknap had already resigned his position in tears back on March 2nd.. He would still be impeached, however, and Custer’s first-hand knowledge would lend credibility. The affair would be called the “Trader Post Scandal.”

In effect, Belknap was giving exclusive rights to traders, or sutlers, at military posts throughout the frontier. As stated, they would in turn inflate their prices and Belknap would receive kickbacks. Percentages also went to a group of Belknap’s “investors,” including Orville Grant, a brother of President Ulysses S. Grant. That’s where Custer got into trouble. President Grant, the army’s Commander in Chief, took Custer’s testimony personally.

That political fallout would soon plague Custer. It delayed his return to his regiment, and it may have contributed to his untimely death. That, however, will be covered in an upcoming post.

What is significant on this date is that the scandal had been brought to light and Custer was drawn into it. Then, as in today’s sad world, politics were often personal, and Custer played them poorly in this case. He played them to his disadvantage, and it nearly cost him his career.

A few other interesting coincidences and connections also came into play. Reporter Mark Kellogg, with the Bismarck Tribune, had published a letter under his pen name “Frontier” chastising President Grant’s brother Orville for his role in Post Trader graft. Kellogg had also seen previous pieces published by the anti-Grant New York Herald. An anonymous piece published by the Herald, was suspected to have been written by Custer. Could it have actually been written by Kellogg?

Did a connection exist between Custer and Kellogg in regard to those essays? Or could that second published piece have originated solely with Kellogg? (He wrote several articles under the pen name “Frontier” during that time period.)

Kellogg will be featured on March 31. What is interesting here, though, is that Kellogg had once shown Republican leanings in the mid-1800’s, but during America’s Civil War he worked for the La Crosse Democrat. He appeared to espouse his publisher’s Copperhead (anti-war Democrat) leanings both then and when he edited the Democrat in Council Bluffs, Iowa. He aligned with those opposed to Reconstruction, and he may have wished to undermine Grant’s presidency.

It appears Custer and Kellogg may have been acquainted at that time. They were on the same train to Bismarck as Custer his wife returned from an extended leave back East. Fatefully, Custer and Kellogg would also travel together (possibly against President Grant’s orders) when the Dakota Column rode out toward the Little Bighorn. More on that will soon follow.

Of significance here is that Custer’s first fateful testimony before Congress in the Trader Post Scandal took place on March 29, 1876, 150 years ago today.